Trade Marks - Acedes Holdings LLC v Clive Sutton Ltd
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Intellectual Property Enterprise Court (HH Judge Hacon) Acedes Holdings LLP and another v Cliver Sutton Ltd and another [2023] EWHC 2005 (IPEC) (7 Aug 2023)
This was a counterclaim by the defendants for the invalidation and revocation of the first claimant's trade mark number 905883806. The mark was AC COBRA registered for automobiles, cars and sports cars. The claimants had brought proceedings for infringement of that trade mark but they discontinued their claim shortly before the trial. The counterclaim came on for trial before His Honour Judge Hacon on 4 July 2023. By para [84] of his judgment of 7 Aug 2023, the learned judge dismissed the counterclaim (Acedes Holdings LLP and another v Cliver Sutton Ltd and another [2023] EWHC 2005).
The Issues
Judge Hacon identified the issues in para [7] of his judgment:
(2) Whether the registration of the AC Cobra Mark stands to be revoked for non-use pursuant to s.46 (1) of the 1994 Act."
Invalidity
S.47 (2) (a) of the 1994 Act provides that the registration of a trade mark may be declared invalid if there is an earlier trade mark within the meaning of s.6 of the 1994 Act in relation to which the conditions set in any of s.5 (1), (2) or (3) of the 1994 Act obtain. Art 5 (1) and (2) (a) of The Trade Marks (Relative Grounds) Order 2007 (SI 2007 No 1976) limits applications under s.47 (2) to the proprietor or a licensee of the earlier trade mark. S.47 (2A) provides:
"The registration of a trade mark may not be declared invalid on the ground that there is an earlier trade mark unless—
(a) the registration procedure for the earlier trade mark was completed within the period of five years ending with the date of the application for the declaration,
(b) the registration procedure for the earlier trade mark was not completed before that date, or
(c) the use conditions are met."
"The registration of a trade mark may not be declared invalid on the ground that there is an earlier trade mark unless—
(a) the registration procedure for the earlier trade mark was completed within the period of five years ending with the date of the application for the declaration,
(b) the registration procedure for the earlier trade mark was not completed before that date, or
(c) the use conditions are met."
The Earlier Marks
The earlier marks relied on were
- trade mark no. 893168 ("the first Ford Cobra Mark") in the form of the word COBRA in respect of "Motor Land Vehicles", filed in the UK Intellectual Property Office on 14 April 1966; and
- trade mark no. 902055416 ("the second Ford Cobra Mark"), also in the form of the word COBRA in respect of goods which include "Motor Land Vehicles", which was filed in the EU Intellectual Property Office on 25 Jan 2001 as an EU trade mark and is now a UK comparable mark.
Both marks were owned by the Ford Motor Company of Dearborn, Michigan in the USA. As Ford was not a party to the litigation, the defendants had to prove that the first defendant, Clive Sutton Ltd,, was a licensee of the Ford Motor Company.
Whether Clive Sutton Ltd was a Licensee of the Ford Moro Company
S.28 (2) of the 1994 Act provides
"…
(2) A licence is not effective unless it is in writing signed by or on behalf of the grantor. Except in Scotland, this requirement may be satisfied in a case where the grantor is a body corporate by the affixing of its seal.…
(4) Where the licence so provides, a sub-licence may be granted by the licensee; and references in this Act to a licence or licensee include a sub-licence or sub-licensee.
..."
The defendants relied on a chain of three licences culminating in a licence dated 27 June 2022 from Carroll Shelby Licensing, Inc to Clive Sutton Ltd, Carroll Shelby was an American racing driver who had imported car bodies from A C Cars of Thames Ditton and fitted them with Ford engines in the USA. The first agreement in that chain was a licence agreement dated 22 Jan 1997 between Mr Shelby and Ford. Clause 1 of that agreement provides as follows:
"Ford hereby grants to Shelby and his heirs an exclusive worldwide royalty-free license to use Ford's federally registered marks COBRA and Snake Design (the "Licensed Trademarks") as part of the trademarks SHELBY COBRA and/or SHELBY COBRA and Snake Design for use strictly in connection with replicas of the 1960s' 427 SHELBY COBRA Roadster, 427 SHELBY COBRA Roadster SC (1965), COBRA Daytona Coupe and COBRA 289. The sole exception to Shelby's exclusive license to use the Licensed Trademarks in connection with the identified replicas shall be Ford's existing non-exclusive license in the United Kingdom. Ford further grants to Shelby and his heirs a royalty-free, non-exclusive license to use Ford's Snake Design trademark in conjunction with Shelby's SHELBY trademark in connection with clothing and related accessory items, made by or for Shelby, in the United States and throughout the world. Ford does not warrant that it has rights to the Licensed Trademarks in any jurisdiction."
..."
The defendants relied on a chain of three licences culminating in a licence dated 27 June 2022 from Carroll Shelby Licensing, Inc to Clive Sutton Ltd, Carroll Shelby was an American racing driver who had imported car bodies from A C Cars of Thames Ditton and fitted them with Ford engines in the USA. The first agreement in that chain was a licence agreement dated 22 Jan 1997 between Mr Shelby and Ford. Clause 1 of that agreement provides as follows:
"Ford hereby grants to Shelby and his heirs an exclusive worldwide royalty-free license to use Ford's federally registered marks COBRA and Snake Design (the "Licensed Trademarks") as part of the trademarks SHELBY COBRA and/or SHELBY COBRA and Snake Design for use strictly in connection with replicas of the 1960s' 427 SHELBY COBRA Roadster, 427 SHELBY COBRA Roadster SC (1965), COBRA Daytona Coupe and COBRA 289. The sole exception to Shelby's exclusive license to use the Licensed Trademarks in connection with the identified replicas shall be Ford's existing non-exclusive license in the United Kingdom. Ford further grants to Shelby and his heirs a royalty-free, non-exclusive license to use Ford's Snake Design trademark in conjunction with Shelby's SHELBY trademark in connection with clothing and related accessory items, made by or for Shelby, in the United States and throughout the world. Ford does not warrant that it has rights to the Licensed Trademarks in any jurisdiction."
Judge Hacon held at para [31] of his judgment that on a correct construction, the 1997 agreement was a licence under Ford's US federal trade marks only and not under any other trade marks.
The defendants tried to rely on an exchange of correspondence between Carroll Shelby Licensing Inc and the Ford Motor Company. On 14 Dec 2022, Mr Shelby wrote to Ford in the following terms:
"2. The use of the term 'Ford's federal registered marks' referred not to any limitation on the use by Shelby of such licensed trademarks, but rather was intended to make reference to the trademarks that in fact Ford Motor Company had 'federally registered' in the United States, and worldwide.
3. Any suggestion or argument that Shelby or its licensees have not been authorized to utilize such licensed trademarks (pursuant to the Trademark Agreement) in any parts of the world is contrary to the original intent of the Trademark License Agreement, as exemplified by the continued use and practice since 1997 of Carroll Shelby, the Carroll Hall Shelby Trust, Carroll Shelby Licensing, Inc. and Ford Motor Company."
3. Any suggestion or argument that Shelby or its licensees have not been authorized to utilize such licensed trademarks (pursuant to the Trademark Agreement) in any parts of the world is contrary to the original intent of the Trademark License Agreement, as exemplified by the continued use and practice since 1997 of Carroll Shelby, the Carroll Hall Shelby Trust, Carroll Shelby Licensing, Inc. and Ford Motor Company."
The defendants argued that Ford could be estopped from denying it had granted a licence to Clive Sutton Ltd by conduct. The judge replied that even if that were so it could not create a licence where none had previously existed. Another problem for the defendants was that Ford registered the second Ford Cobra Mark after the 1997 agreement and could not possibly have been in the parties' contemplation. Also, the licence precluded the grant of sub-licences without Ford's permission which was never granted. The judge concluded that the first defendant had never been a licensee under either of the Ford Cobra marks and neither defendant was entitled to make an application for a declaration of invalidity of the first claimant's mark.
Whether the Use Conditions had been met
Although his finding that the first defendant had not been a licensee of the Ford Motor Company was enough to dispose of the invalidity counterclaim, His Honour considered whether the "use conditions" referred to in s.47 (2A) (c) had been met. S.47 (2B) provides:
"The use conditions are met if–
(a) the earlier trade mark has been put to genuine use in the United Kingdom by the proprietor or with their consent in relation to the goods or services for which it is registered—
(i) within the period of 5 years ending with the date of application for the declaration, and
(ii) within the period of 5 years ending with the date of filing of the application for registration of the later trade mark or (where applicable) the date of the priority claimed in respect of that application where, at that date, the five year period within which the earlier trade mark should have been put to genuine use as provided in section 46 (1) (a) has expired, or
(b) it has not been so used, but there are proper reasons for non-use."
"The use conditions are met if–
(a) the earlier trade mark has been put to genuine use in the United Kingdom by the proprietor or with their consent in relation to the goods or services for which it is registered—
(i) within the period of 5 years ending with the date of application for the declaration, and
(ii) within the period of 5 years ending with the date of filing of the application for registration of the later trade mark or (where applicable) the date of the priority claimed in respect of that application where, at that date, the five year period within which the earlier trade mark should have been put to genuine use as provided in section 46 (1) (a) has expired, or
(b) it has not been so used, but there are proper reasons for non-use."
Judge Hacon referred to paras [114] to [118] of Mr Justice Arnold's judgment in Walton International Limited v Verweij Fashion BV [2018] RPC 19, [2018] ETMR 34, [2018] EWHC 1608 (Ch):
"[114] The law with respect to genuine use. The CJEU has considered what amounts to "genuine use" of a trade mark in a series of cases: Case C-40/01 Ansul BV v Ajax Brandbeveiliging BV [2003] ECR I-2439, La Mer (cited above), Case C-416/04 P Sunrider Corp v Office for Harmonisation in the Internal Market (Trade Marks and Designs) [2006] ECR I-4237, Case C-442/07 Verein Radetsky-Order v Bundervsvereinigung Kamaradschaft 'Feldmarschall Radetsky' [2008] ECR I-9223, Case C-495/07 Silberquelle GmbH v Maselli-Strickmode GmbH [2009] ECR I-2759, Case C-149/11 Leno Merken BV v Hagelkruis Beheer BV [EU: C:2012:816], [2013] ETMR 16, Case C-609/11 P Centrotherm Systemtechnik GmbH v Centrotherm Clean Solutions GmbH & Co KG [EU: C:2013:592], [2014] ETMR, Case C-141/13 P Reber Holding & Co KG v Office for Harmonisation in the Internal Market (Trade Marks and Designs) [EU: C:2014:2089] and Case C-689/15 W.F. W.F. Gözze Frottierweberei GmbH v Verein Bremer Baumwollbörse [EU: C:2017:434], [2017] Bus LR 1795.
[115] The principles established by these cases may be summarised as follows:
(1) Genuine use means actual use of the trade mark by the proprietor or by a third party with authority to use the mark: Ansul at [35] and [37].
(2) The use must be more than merely token, that is to say, serving solely to preserve the rights conferred by the registration of the mark: Ansul at [36]; Sunrider at [70]; Verein at [13]; Leno at [29]; Centrotherm at [71]; Reber at [29].
(3) The use must be consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of the goods or services to the consumer or end user by enabling him to distinguish the goods or services from others which have another origin: Ansul at [36]; Sunrider at [70]; Verein at [13]; Silberquelle at [17]; Leno at [29]; Centrotherm at [71]. Accordingly, affixing of a trade mark on goods as a label of quality is not genuine use unless it guarantees, additionally and simultaneously, to consumers that those goods come from a single undertaking under the control of which the goods are manufactured and which is responsible for their quality: Gözze at [43]-[51].
(4) Use of the mark must relate to goods or services which are already marketed or which are about to be marketed and for which preparations to secure customers are under way, particularly in the form of advertising campaigns: Ansul at [37]. Internal use by the proprietor does not suffice: Ansul at [37]; Verein at [14] and [22]. Nor does the distribution of promotional items as a reward for the purchase of other goods and to encourage the sale of the latter: Silberquelle at [20]-[21]. But use by a non-profit making association can constitute genuine use: Verein at [16]-[23].
(5) The use must be by way of real commercial exploitation of the mark on the market for the relevant goods or services, that is to say, use in accordance with the commercial raison d'être of the mark, which is to create or preserve an outlet for the goods or services that bear the mark: Ansul at [37]-[38]; Verein at [14]; Silberquelle at [18]; Centrotherm at [71]; Reber at [29].
(6) All the relevant facts and circumstances must be taken into account in determining whether there is real commercial exploitation of the mark, including: (a) whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods and services in question; (b) the nature of the goods or services; (c) the characteristics of the market concerned; (d) the scale and frequency of use of the mark; (e) whether the mark is used for the purpose of marketing all the goods and services covered by the mark or just some of them; (f) the evidence that the proprietor is able to provide; and (g) the territorial extent of the use: Ansul at [38] and [39]; La Mer at [22]-[23]; Sunrider at [70]-[71], [76]; Leno at [29]-[30], [56]; Centrotherm at [72]-[76]; Reber at [29], [32]-[34].
(7) Use of the mark need not always be quantitatively significant for it to be deemed genuine. Even minimal use may qualify as genuine use if it is deemed to be justified in the economic sector concerned for the purpose of creating or preserving market share for the relevant goods or services. For example, use of the mark by a single client which imports the relevant goods can be sufficient to demonstrate that such use is genuine, if it appears that the import operation has a genuine commercial justification for the proprietor. Thus there is no de minimis rule: Ansul at [39]; La Mer at [21], [24] and [25]; Sunrider at [72] and [76]-[77]; Leno at [55].
(8) It is not the case that every proven commercial use of the mark may automatically be deemed to constitute genuine use: Reber at [32].
[116] Counsel for the Claimants suggested that there was a difference between the assessment of what amounted to genuine use of a trade mark, and in particular the quantitative extent of the use required, depending on whether the trade mark was a national trade mark or an EU trade mark. As counsel for the Defendant pointed out, however, the Court of Justice has expressly held that the same principles are applicable to the interpretation of the relevant provisions of both the Directive and the Regulation: see Leno at [31].
[117] Although both counsel made submissions based on the facts of some of these cases, and in particular the quantities of goods involved, the Court of Justice has made it clear that this is not a helpful exercise. As the Court stated in Sunrider at [77], 'courts ruling in two different cases may assess differently the genuine nature of the use alleged before them, even when instances of that use have generated comparable sales volumes.' The Court has repeatedly made it clear that the assessment is a multi-factorial one, in which the quantity of the goods sold is only one factor. Thus, as has often been pointed out, it depends on (among other things) the nature of the goods: sale of a small quantity of goods is more likely to qualify as genuine use where the goods are passenger airliners than where the goods are potatoes.
[118] The law with respect to genuine use in the Union. Whereas a national mark needs only to have been used in the Member State in question, in the case of a EU trade mark there must be genuine use of the mark 'in the Union'. In this regard, the Court of Justice has laid down additional principles to those summarised above which I would summarise as follows:
(9) The territorial borders of the Member States should be disregarded in the assessment of whether a trade mark has been put to genuine use in the Union: Leno at [44], [57].
(10) While it is reasonable to expect that a EU trade mark should be used in a larger area than a national trade mark, it is not necessary that the mark should be used in an extensive geographical area for the use to be deemed genuine, since this depends on the characteristics of the goods or services and the market for them: Leno at [50], [54]-[55].
(11) It cannot be ruled out that, in certain circumstances, the market for the goods or services in question is in fact restricted to the territory of a single Member State, and in such a case use of the EU trade mark in that territory might satisfy the conditions for genuine use of a EU trade mark: Leno at [50]."
"[114] The law with respect to genuine use. The CJEU has considered what amounts to "genuine use" of a trade mark in a series of cases: Case C-40/01 Ansul BV v Ajax Brandbeveiliging BV [2003] ECR I-2439, La Mer (cited above), Case C-416/04 P Sunrider Corp v Office for Harmonisation in the Internal Market (Trade Marks and Designs) [2006] ECR I-4237, Case C-442/07 Verein Radetsky-Order v Bundervsvereinigung Kamaradschaft 'Feldmarschall Radetsky' [2008] ECR I-9223, Case C-495/07 Silberquelle GmbH v Maselli-Strickmode GmbH [2009] ECR I-2759, Case C-149/11 Leno Merken BV v Hagelkruis Beheer BV [EU: C:2012:816], [2013] ETMR 16, Case C-609/11 P Centrotherm Systemtechnik GmbH v Centrotherm Clean Solutions GmbH & Co KG [EU: C:2013:592], [2014] ETMR, Case C-141/13 P Reber Holding & Co KG v Office for Harmonisation in the Internal Market (Trade Marks and Designs) [EU: C:2014:2089] and Case C-689/15 W.F. W.F. Gözze Frottierweberei GmbH v Verein Bremer Baumwollbörse [EU: C:2017:434], [2017] Bus LR 1795.
[115] The principles established by these cases may be summarised as follows:
(1) Genuine use means actual use of the trade mark by the proprietor or by a third party with authority to use the mark: Ansul at [35] and [37].
(2) The use must be more than merely token, that is to say, serving solely to preserve the rights conferred by the registration of the mark: Ansul at [36]; Sunrider at [70]; Verein at [13]; Leno at [29]; Centrotherm at [71]; Reber at [29].
(3) The use must be consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of the goods or services to the consumer or end user by enabling him to distinguish the goods or services from others which have another origin: Ansul at [36]; Sunrider at [70]; Verein at [13]; Silberquelle at [17]; Leno at [29]; Centrotherm at [71]. Accordingly, affixing of a trade mark on goods as a label of quality is not genuine use unless it guarantees, additionally and simultaneously, to consumers that those goods come from a single undertaking under the control of which the goods are manufactured and which is responsible for their quality: Gözze at [43]-[51].
(4) Use of the mark must relate to goods or services which are already marketed or which are about to be marketed and for which preparations to secure customers are under way, particularly in the form of advertising campaigns: Ansul at [37]. Internal use by the proprietor does not suffice: Ansul at [37]; Verein at [14] and [22]. Nor does the distribution of promotional items as a reward for the purchase of other goods and to encourage the sale of the latter: Silberquelle at [20]-[21]. But use by a non-profit making association can constitute genuine use: Verein at [16]-[23].
(5) The use must be by way of real commercial exploitation of the mark on the market for the relevant goods or services, that is to say, use in accordance with the commercial raison d'être of the mark, which is to create or preserve an outlet for the goods or services that bear the mark: Ansul at [37]-[38]; Verein at [14]; Silberquelle at [18]; Centrotherm at [71]; Reber at [29].
(6) All the relevant facts and circumstances must be taken into account in determining whether there is real commercial exploitation of the mark, including: (a) whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods and services in question; (b) the nature of the goods or services; (c) the characteristics of the market concerned; (d) the scale and frequency of use of the mark; (e) whether the mark is used for the purpose of marketing all the goods and services covered by the mark or just some of them; (f) the evidence that the proprietor is able to provide; and (g) the territorial extent of the use: Ansul at [38] and [39]; La Mer at [22]-[23]; Sunrider at [70]-[71], [76]; Leno at [29]-[30], [56]; Centrotherm at [72]-[76]; Reber at [29], [32]-[34].
(7) Use of the mark need not always be quantitatively significant for it to be deemed genuine. Even minimal use may qualify as genuine use if it is deemed to be justified in the economic sector concerned for the purpose of creating or preserving market share for the relevant goods or services. For example, use of the mark by a single client which imports the relevant goods can be sufficient to demonstrate that such use is genuine, if it appears that the import operation has a genuine commercial justification for the proprietor. Thus there is no de minimis rule: Ansul at [39]; La Mer at [21], [24] and [25]; Sunrider at [72] and [76]-[77]; Leno at [55].
(8) It is not the case that every proven commercial use of the mark may automatically be deemed to constitute genuine use: Reber at [32].
[116] Counsel for the Claimants suggested that there was a difference between the assessment of what amounted to genuine use of a trade mark, and in particular the quantitative extent of the use required, depending on whether the trade mark was a national trade mark or an EU trade mark. As counsel for the Defendant pointed out, however, the Court of Justice has expressly held that the same principles are applicable to the interpretation of the relevant provisions of both the Directive and the Regulation: see Leno at [31].
[117] Although both counsel made submissions based on the facts of some of these cases, and in particular the quantities of goods involved, the Court of Justice has made it clear that this is not a helpful exercise. As the Court stated in Sunrider at [77], 'courts ruling in two different cases may assess differently the genuine nature of the use alleged before them, even when instances of that use have generated comparable sales volumes.' The Court has repeatedly made it clear that the assessment is a multi-factorial one, in which the quantity of the goods sold is only one factor. Thus, as has often been pointed out, it depends on (among other things) the nature of the goods: sale of a small quantity of goods is more likely to qualify as genuine use where the goods are passenger airliners than where the goods are potatoes.
[118] The law with respect to genuine use in the Union. Whereas a national mark needs only to have been used in the Member State in question, in the case of a EU trade mark there must be genuine use of the mark 'in the Union'. In this regard, the Court of Justice has laid down additional principles to those summarised above which I would summarise as follows:
(9) The territorial borders of the Member States should be disregarded in the assessment of whether a trade mark has been put to genuine use in the Union: Leno at [44], [57].
(10) While it is reasonable to expect that a EU trade mark should be used in a larger area than a national trade mark, it is not necessary that the mark should be used in an extensive geographical area for the use to be deemed genuine, since this depends on the characteristics of the goods or services and the market for them: Leno at [50], [54]-[55].
(11) It cannot be ruled out that, in certain circumstances, the market for the goods or services in question is in fact restricted to the territory of a single Member State, and in such a case use of the EU trade mark in that territory might satisfy the conditions for genuine use of a EU trade mark: Leno at [50]."
S.5 (2) of the 1994 Act
S,5 (2) of the 1994 Act provides:
"A trade mark shall not be registered if because—
(a) it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or
(b) it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark."
The goods for which the AC Cobra mark and the Ford Cobra marks had been registered were identical. The question for Judge Hacon was whether AC COBRA was sufficiently similar to COBRA to give rise to a likelihood of confusion on the part of the average consumer. The judge referred to para [87] of the Court of Appeal's judgment in Specsavers International Healthcare Ltd and others v Asda Stores Ltd [2012] ETMR 17, [2012] EWCA Civ 24, [2012] FSR 19:
"(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
(e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense;
(k) if the association between the marks creates a risk that the public might believe that the respective goods or services come from the same or economically linked undertakings, there is a likelihood of confusion."
The evidence before the judge on that point had been filed to deal with the discontinued claim for infringement. Nevertheless, he had to follow it. He held at para [67] that:
"On the defendants' own evidence the sign 'Cobra' is and was at relevant times a generic description of a type of car. Use of the AC Cobra Mark cannot have affected the essential function of either of the Ford Cobra Marks as a guarantee of origin (see, for example, Case C-206/01 Arsenal v Reed EU: C:2002:651) – to the extent that the latter were capable of functioning as trade marks in the first place. There can have been no likelihood of confusion as to origin. The defendants' case in relation to s.5 (2) of the 1994 Act is not made out."
S.5 (3) of the 1994 Act
S.5 (3) of the 1994 Act provides:
(a) is identical with or similar to an earlier trade mark, and
(b) ….
shall not be registered if, or to the extent that, the earlier trade mark has a reputation in the United Kingdom ... and the use of the later mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.
(3A) Subsection (3) applies irrespective of whether the goods and services for which the trade mark is to be registered are identical with, similar to or not similar to those for which the earlier trade mark is protected."
The issue, in this case, was whether the Ford Cobra marks had established a reputation by the relevant date. His Honour referred to para [69] of his judgment in Burgerista Operations GmbH v Burgista Bros Ltd [2018] EWHC 35 (IPEC) on this point in which he took into account the judgments of the Court of Justice of the European Union in PAGO International GmbH v Tirolmilch Registrierte Genossenschaft mbH (C-301/07) EU: C:2009:611, Iron & Smith Kft v Unilever NV (C-125/14) EU: C:2015:539 and Iron & Smith and Ornua Co-operative Ltd v Tindale & Stanton Ltd Espana SL ...C-93/16) EU:C:2017:57:
"I draw the following from the judgments of the Court in PAGO and Iron & Smith and from the opinion of Advocate General Wahl in Iron & Smith :
(1) an EU trade mark has a reputation within the meaning of art.9(2)(c) if it was known to a significant part of the relevant public at the relevant date;
(2) the relevant public are those concerned by the products or services covered by the trade mark;
(3) the relevant date is the date on which the defendant first started to use the accused sign; [see the discussion in Burgerista at [54]-[59]]
(4) from a geographical perspective, the trade mark must have been known in a substantial part of the EU at the relevant date;
(5) there is no fixed percentage threshold which can be used to assess what constitutes a significant part of the public; it is proportion rather than absolute numbers that matters;
(6) reputation constitutes a knowledge threshold, to be assessed according to a combination of geographical and economic criteria;
(7) all relevant facts are to be taken into consideration when making the assessment, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by undertaking in promoting it;
(8) the market for the goods or services in question and from this the identity of the relevant public ought to assume a paramount role in the assessment; and
(9) the territory of a single Member State (large or small) may constitute a substantial part of the EU, but the assessment must be conducted without consideration of geographical borders."
Whether Ford had acquiesced in the Use of the AC Cobra Mark
S.48 (1) of the 1994 Act provides:
"(1) Where the proprietor of an earlier trade mark or other earlier right has acquiesced for a continuous period of five years in the use of a registered trade mark in the United Kingdom, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right—
(a) to apply for a declaration that the registration of the later trade mark is invalid, …"
The claimants contended that Ford had acquiesced in the use of their AC Cobra mark between 13 May 2017 to 12 May 2022.
The judge remarked that the Court of Appeal had considered statutory acquiescence under s.48 (1) in Combe International LLC v Dr August Wolff GmbH and Co KG Arzneimittel [2022] EWCA Civ 1562 between paras [29] and [96]. Lord Justice Arnold discussed the elements two of which were relevant to the argument on acquiescence in the present case. The first was the nature and extent of use of the later trade mark during the relevant 5-year period before it could be said that the proprietor of the earlier mark had acquiesced to such use. The second was the extent of awareness of such use required on the part of the proprietor.
The judge remarked that the Court of Appeal had considered statutory acquiescence under s.48 (1) in Combe International LLC v Dr August Wolff GmbH and Co KG Arzneimittel [2022] EWCA Civ 1562 between paras [29] and [96]. Lord Justice Arnold discussed the elements two of which were relevant to the argument on acquiescence in the present case. The first was the nature and extent of use of the later trade mark during the relevant 5-year period before it could be said that the proprietor of the earlier mark had acquiesced to such use. The second was the extent of awareness of such use required on the part of the proprietor.
With regard to the nature and extent of use of the later mark, Lord Justice Arnold said:
"[76] Continuous use on a meaningful or commercial scale. There are two questions here: first, does the use need to be continuous; and secondly, does it need to be on a meaningful or commercial scale? I shall address them separately, but as will appear they are related.
[77] Although the proposition that the use of the later trade mark must be continuous throughout the five year period receives support from some distinguished commentators, I do not accept it. Counsel for the Defendants gave a simple example of a case where it could not be right to require continuous use, namely seasonal goods. Some goods are only sold at certain times of year such as Easter or Christmas. As counsel for Combe was driven to accept, use of the later trade mark during the relevant season for five successive years must be sufficient even if there is no use of it outside the relevant season. More generally, a requirement of continuous use would be unworkable. As counsel for Combe accepted, it could not mean that there had to be use of the later trade mark every second of every hour of every day of every week of every month of every year for five years. How then would one judge whether the use was sufficiently continuous? Would it be enough to use it once an hour? Once a day? Once a week? Once a month? Once a year? And how active would the use have to be for this purpose? Would it be sufficient that goods bearing the trade mark were sitting on the shelf of a shop even if no one bought them for months at a time?
[78] On the other hand, as counsel for the Defendants accepted, it cannot be sufficient for there to be use for a short period of time, say one week, at the beginning of the five year period in question. As counsel for the Defendants submitted, the crux of the single condition in section 48(1) is acquiescence by the proprietor of the earlier trade mark for five successive years in the use of the later trade mark. If there is no use, there cannot be acquiescence in the use. The same message is conveyed by the English language version of recital (12) to Directive 2008/95, which refers to the proprietor of the earlier trade mark having "knowingly tolerated the use [of the later trade mark] for a substantial length of time".
[79] In this connection, it is pertinent to note that, as Advocate General Tstenjak pointed out in her opinion in Budvar EU: C:2011:605 at [69], all the Romance language versions, and the German and Dutch versions, of Article 9 (1) use the equivalents of the words "toleration" and "tolerated" rather than the equivalents of the words "acquiescence" and "acquiesced". Furthermore, taking the German version by way of example, this expresses the condition in the following way: " Hat …der Inhaber einer älteren Marke … die Benutzung einer jüngeren eingetragenen Marke … während eines Zeitraums von funf aufeinander folgenden Jahren in Kenntnis dieser Benutzung geduldet " (Where the proprietor of an older trade mark has tolerated the use of a younger registered trademark for a period of five consecutive years with knowledge of this use).
[80] In my judgment the answer to this conundrum is that there must be continued, but not necessarily continuous, use of the later trade mark throughout the five year period. What amounts to continued use for this purpose will be a fact-sensitive question which depends on the nature of the goods or services and on the characteristics of the average consumer of those goods or services. Thus fewer instances of use may suffice for expensive or specialised goods that are only bought occasionally than for low-cost everyday items which are purchased regularly. Even in the case of inexpensive commonplace goods, periodic use over five years may well suffice.
[81] As for the level of use required, the Defendants contend that any use which is an infringing use is sufficient, while Combe contend that the use must amount to genuine use such as would defeat a claim for revocation of the later trade mark on the ground of non-use. In support of the latter contention, counsel for Combe argued that it would not make sense to protect use of the later trade mark if it was liable to revocation for non-use.
[82] Although it again has the support of some distinguished commentators, in my judgment genuine use cannot be the right test. Revocation for non-use takes effect from the end of the five year period in question; it does not operate ab initio (unlike a declaration of invalidity). Furthermore, a claim for revocation on the ground of non-use can be defeated by demonstrating genuine use of the trade mark at any time within that period. It may be enough to use the trade mark only in the last month. Thus a requirement of genuine use would be inconsistent with the requirement of continuous use which Combe themselves advocate. Moreover, the purposes of the two sets of provisions are different. The purposes of the provisions on acquiescence are those set out above. The purpose of the non-use provisions are to sanction a failure to put the trade mark to use within the five years allowed (absent proper reasons for non-use).
[83] Accordingly, I agree with the Defendants that all that is required is use which infringes the earlier trade mark. This is not to say that the scale of use is irrelevant. On the contrary, it may be relevant in two ways. First, as indicated above, it may be relevant to the question of whether there has been continued use of the later trade mark for five years. The acid test, it seems to me, is that there must be use for five years which a vigilant trade mark proprietor could be expected to oppose. Secondly, as discussed below, it may be relevant to the question of whether the proprietor of the earlier trade mark is aware of the use."
With regard to awareness, Lord Justice Arnold said:
"[90] Awareness . Although I disagree with the judge's first three reasons for rejecting the Defendants' section 48 (1) defence, I agree with the fourth. Section 48 (1) is explicit that the proprietor of the earlier trade mark must be aware of the use of the later trade mark for five years. This is perfectly consistent with Article 9 (1). If the proprietor is not aware of the use for a significant part of that period, it cannot be said to have acquiesced in that use or knowingly tolerated it.
[91] The Defendants contend that, once the proprietor of the earlier trade mark becomes aware of the use of the later trade mark, then it will continue to be aware of such use if the use continues. I do not agree that this is the correct way of looking at the issue. Acquiescence or toleration requires continued awareness of the use. That does not mean that the proprietor can say that it has ceased to be aware of the use merely because of the passage of time, or that it can turn a blind eye to the question of whether the use is continuing. But if the proprietor genuinely and reasonably believes that the use has ceased for a significant period of time, then I do not consider that the proprietor can be said to be acquiescing in or tolerating the use during that period."
"[90] Awareness . Although I disagree with the judge's first three reasons for rejecting the Defendants' section 48 (1) defence, I agree with the fourth. Section 48 (1) is explicit that the proprietor of the earlier trade mark must be aware of the use of the later trade mark for five years. This is perfectly consistent with Article 9 (1). If the proprietor is not aware of the use for a significant part of that period, it cannot be said to have acquiesced in that use or knowingly tolerated it.
[91] The Defendants contend that, once the proprietor of the earlier trade mark becomes aware of the use of the later trade mark, then it will continue to be aware of such use if the use continues. I do not agree that this is the correct way of looking at the issue. Acquiescence or toleration requires continued awareness of the use. That does not mean that the proprietor can say that it has ceased to be aware of the use merely because of the passage of time, or that it can turn a blind eye to the question of whether the use is continuing. But if the proprietor genuinely and reasonably believes that the use has ceased for a significant period of time, then I do not consider that the proprietor can be said to be acquiescing in or tolerating the use during that period."
Judge Hacon that use that was sufficient for the purposes of s.47 (2B) would also be sufficient for the purposes of s.48. Correspondence between the parties' solicitors indicated that the claimants and Ford were aware of the defendants' use of the AC Cobra Mark but took no action, His Honour held at para [82] that on the balance of probabilities, Ford was aware of the defendants' use of the AC Cobra Mark. Accordingly, acquiescence by Ford had been established.
No Revocation for Non-Use
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